LONDON — BAE Systems said though it expects some uncertainty as a result of the UK's decision to exit the European Union, there's no sign the vote will have a short-term impact on its business. The company's statement comes as it rolls out first-half results that show a small rise in revenues compared to 2015.
Overall sales for the first half edged up 2.8 percent to £8.71 billion (US $11.44 billion). Helped in part by a weakening pound, profits rose to £408 million from £390 million last year.
"In the UK, the result of the European Union referendum will lead to a period of uncertainty, but we do not anticipate any material near-term trading impact on our business," BAE CEO Ian King said Thursday.
The company didn't break out its European revenues for the half year but instead bundled them into the rest of the world figure of 9 percent of total sales.
BAE's European business is more exposed to the fortunes of the Eurofighter Typhoon program than any fallout from the British leaving the European Union.
In 2015, BAE reported that more than half of its sales to Europe were related to work on the Typhoon combat jet, in which BAE is a partner with Airbus and Leonardo.
Emphasizing the point about the key part the Typhoon plays in its European business, the company said in its results statement that the recent sale by Leonardo of 28 Typhoons to Kuwait would generate around £1 billion of work for BAE.
King said he didn't expect the Brexit vote would impact British defense spending.
Overall company revenues continued to be dominated by the US with 36 percent of revenues in the first half. Britain and Saudi Arabia remain the company's other major markets.
King said the prospects for business in its largest market were improving.
"In the US, we are seeing encouraging signs of a return to growth in defense budgets and improved prospects for our core franchises," he said. "Despite economic and political uncertainties, governments in our major markets continue to prioritize national security, with strong demand for our capabilities."
The importance of the US business was underscored a few hours after the release of its results with an announcement that BAE had signed a $245 million deal with the British Ministry of Defence (MoD) to supply its US-built 5-inch Mk45 Mod 2 naval guns for an initial batch of three Type 26 frigates being developed for the Royal Navy.
The contract covers the supply naval guns systems and ammunition for the first three ships and a training system with deliveries expected from 2020. There is also an option for a further five weapons.
The Royal Navy is planning to eventually order eight of the Type 26s, although production go-ahead on the program have been stalled for months as the MoD and BAE hammer out the final terms of a deal for the first three anti-submarine warships.
The company's naval activities were boosted earlier this month when the British Parliament voted to move forward on a £31 billion program to build four nuclear missile submarines at BAE's yard in Barrow-in-Furness, northern England.
Andrew Chuter is the United Kingdom correspondent for Defense News.
